The relationship between tax administrators and tax practitioners: the Australasian environment

Dabner, Justin H., and Burton, Mark
(2008)
The relationship between tax administrators and tax practitioners: the Australasian environment.
New Zealand Journal of Taxation Law and Policy, 14 (1). pp. 99-115.

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Abstract

The current approach to administering the taxation laws by the New Zealand (Inland Revenue) is founded on the responsive regulation model. Under this model, the administrators' approach reflects the posture adopted by the taxpayer. Thus, the focus is on extending assistance to compliant taxpayers and punishing recalcitrant taxpayers. If is thought that this model most effectively encourages voluntary compliance by taxpayers and thereby enhances fhe efficiency of tax administration. Notably, this model has been borrowed from the Australian Taxation Office (ATO) where it was introduced some years prior to the New Zealand experiment.

Pursuant to the model, both the Australian and New Zealand tax administrators describe their relationship with the profession as collaborative or even a partnership. This is in contrast to historical precedents where typically the relationship has been cast as adversarial. The move from an adversarial relationship to a partnership raises many theoretical issues that need to be carefully managed. In
particular, issues relating to conflicts of interest, lack of transparency, consistency in application and regulatory capture are conceivable. Nevertheless, there is some evidence to suggest that the partnership model has been better received in New Zealand, at least relative to the Australian experience, which has been more problematic. If this is indeed the case, then it is important to identify
the cultural, administrative and/or legislative differences to which this can be attributed.